Brambles (ASX: BXB) has today reported a strong set of numbers for its first quarter of trading for the current financial year. Its major division, which includes the CHEP pallet operations, Pooling Solutions, achieved a 7% increase in sales revenue to US$1.312 billion. On a constant currency basis, growth was 8% with new business wins and the contribution from recently acquired Pallecon the major sources of the revenue growth.
Highlights from the results included the Americas Pallet division, which achieved growth of 5% and 7% on a constant currency basis, the reusable plastic crate business, which achieved 12% growth (11% constant currency) and the container business, which off a much smaller base achieved 37% growth (39% constant currency).
Commenting on Brambles first quarter, CEO Tom Gorman stated that:
"Our trading performance in Pooling Solutions during the first quarter of FY14 was broadly consistent with our expectations. Despite continued muted levels of underlying sales growth in the consumer staples sector, we are benefiting from the execution of our growth strategy."
Gorman also reconfirmed Brambles' previously stated guidance of US$930 million to US$965 million was still on track. The market appeared to like what it heard pushing the stock up around 1%, while the broader S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) was flat.
Brambles' exposure to a wide range of foreign markets is a huge plus for shareholders given the challenges on the domestic front. For this reason, other global companies such as Amcor (ASX: AMC) and Ansell (ASX: ANN) have also been in favour with investors as they offer exposure to faster growing developing economies as well.
With Amcor and Ansell both offering products to growing industry segments such as healthcare in emerging markets, they have the potential to continue to grow revenues and earnings even if Australia's growth slows further.
Foolish takeaway
Buying companies that are not dependant on any one product or any one customer can not only reduce the risk on an investment but it can also lead to higher returns by allowing a company to shift its focus as the dynamics of its sales environment change. For companies with a concentrated product or customer exposure, investors need to monitor their investment particularly closely.
Companies with diversified earnings streams are better positioned to pay maintainable dividends, just like our #1 dividend-paying stock. Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."
More reading
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
